Gestalt perceptual theory says that the visual system groups features together on the basis of similarity, proximity, smoothness and closure. Recent psychophysical and neurophysiolgical studies have found evidence of spatial facilitation and suppression that appears to conform to the perceptual grouping rules. The perceptual grouping may be implemented by long-range lateral connections in visual cortex. Recently, we found that single-cell responses to a central target were modulated by collinear flanking objects. This modulation was dependent on the cell's contrast threshold for the central target. We hypothesized that the lateral interactions in area 17 are arranged into two antagonistic mechanisms: 1) Facilitation is spatially organized along the optimal orientation of the cell in a collinear manner; 2) Suppression is non-selective for orientation or spatial frequency, and is distributed diffusely around the cell's response field. The balance between these two mechanisms, dictated by the cell's contrast threshold, controls the cells firing. Based on this hypothesis, we will study the following four questions by physiological recording of single cells from the visual cortex of anesthetized and paralyzed preparations. Aim l will answer the question whether the context-dependent modulation of cellular responses depends on contrast relative to the cell's contrast threshold, rather than on the physical contrast of the stimulus. We want to know how general the contrast threshold-dependent facilitation and suppression is. Aim 2 will dissect the spatial organization of the modulatory interactions. In particular, we will elucidate an organizational principle along the optimal orientation of the cell under study. Aim 3 will study effects of distance between target and flanks, flanks size, and their spatial frequency on the modulatory interactions. This aim is focused on an issue of similarity and closeness of target and flanks. Aim 4 will extend our search of the neural basis of perceptual grouping one step ahead, using compound stimuli made of many elements in curve. We will answer whether single cells respond differently when the optimally positioned test stimulus is a part of a smoothly curved path or circle composed of many of the same patterns as the test patch.